The UAE's Ministry of Finance (MoF) ruled out any plan to hike value-added tax (VAT) following Saudi Arabia's announcement of a three-fold increase in VAT on Monday.
Younis Haji Al Khoori, Undersecretary of MoF, said the focus is to work with all government entities to assess the priorities for the post-Covid-19 stage. Furthermore, the ministry will reorient the financial resources to prepare for the future and continued growth to ensure the security and safety of the communities.
In a surprise move, Riyadh increased the VAT rate from five percent to 15 percent and also suspended the cost of living allowance to increase revenues with effect from June 1, 2020.
Sources and industry executives privy to the matter said that contrary to the Saudi move, the UAE was mulling dropping VAT temporarily until the situation surrounding Covid-19 is stabilized and the economy returns back on track.